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Consultant warns general fund reserves below policy; Baker Tilly to deliver year‑end forecast
Summary
Matt of Baker Tilly told the council the city's short-term finances are stable but flagged the general fund and two utility funds as below the 15% reserve policy at year-end; he said staff will provide a year‑end forecast for budget planning and bond‑rating considerations.
Matt, the Baker Tilly consultant, presented a first‑quarter financial dashboard and cautioned the council about the general fund reserve and two utility funds.
"The only thing that really concerns me is the fund balance of the general fund as we've spoken about before and two of your utility funds," Matt said, noting that the official 15% reserve policy is assessed on year‑end operations and that the current snapshot shows an ending general fund balance well below the 15% target (the presenter cited a prior year ending balance near $320,000 and a 15% target of roughly $656,000). He said the general fund is higher now because of the January property‑tax distribution and that a formal forecast will be presented to the budget/finance committee at its next meeting.
Council members pressed whether mid‑year snapshots were appropriate for policy determinations and asked if projected property‑tax distributions and sales tax trends would close the gap. Matt said a rolling monthly forecast is being developed and emphasized rating agencies will judge the municipality by where funds close at year‑end, not midyear snapshots. He also repeated that water and wastewater funds remain weaker and will take several years to recover absent policy changes.
The presentation set a timeline for the consultant to deliver a forecast to help the council evaluate revenue, rate options and budget choices ahead of the 2027 budget cycle.
